I report on how consciousness and community are transcending god and state, locally in Washington, DC, and globally, where ever I see progress - or backsliding, including on the feminist front! "Imagine there's no countries, and no religion, too." Explore this blog, think about the issues, comment constructively, connect via social media.

Wednesday, January 03, 2018

Review of Jane Jacobs' "Cities and the Wealth of Nations"

Combing through my files, I found a book review I wrote for
the Libertarian Party News in the spring of 1985 and reprinted a few years back in my old Vermont Commons blog (secessionist site now renamed/rebranded to VermontIndependent.org/). The LP News editor at the
time was Karl Hess and our views were very sympatico. (I later wrote
the introduction to a Loompanic’s republication of his book “Community
Technology.”)

It is amazing to me how similar my ideas at the time are to those
today. It also shows the virtue of patience: today a majority of the
world’s people – and even a large plurality of Americans – are ready to
listen to ideas about radical political decentralization and
secession.

So below is a version slightly edited to reflect the
passing of the years and to appeal to a wider audience than just
libertarians. After reading it I hope you’ll agree Jane Jacobs (1916-2006) is yet another heroine of the decentralist and secessionist movements.

Cities and the Wealth of Nations: Principles of Economic Life by Jane Jacobs, Random House, 1985.

Jane Jacobs activist and writer.

In the twenty-five years after community activist Jane Jacobs’ book The Death and Life of Great America Cities
first took on big government and private developers, accusing them of
ruining cities and their neighborhoods, it sold more than 250,000
copies. In those years most city planners and architects swung over to
her position, and she earned an international reputation as an urban
expert. In her Cities and the Wealth of Nations, Jacobs took on
economists from Adam Smith to Milton Friedman, as well as the
institution of the nation state, arguing for truly free markets and the
“expedient multiplication of sovereignties” – i.e., the secession of
cities from nation states. (Definitions of what is a “city” may differ, but I would say that today generally it is any urban area of at least 50,000 people.)

Jacobs’ book was praised by many urbanists and panned by many
economists. It divided the “liberal” press, with New York Magazine, The
Nation and The New Republic denouncing Jacobs’ new “conservative” and
even “dangerous” direction, while The Atlantic , Mother Jones and The
New Yorker printed favorable reviews. The Los Angeles Times awarded the
book its 1984 Book Prize for Current Events. Even the business press was
divided: Barron’s mocked it while Forbes respectfully interviewed its
author.

Jane Jacobs was not an economist , but like many free market
economists she rejected mathematical economic models in favor of
analytical reasoning, direct observation and empirical evidence.
Similarly, she rejected the macroeconomic assumption that “national
economies are useful and salient entitles for understanding how economic
life works” and economists’ assertions that government intervention can
ensure healthy economies. Rather, she regarded cities, hotbeds of
entrepreneurial activity, and as the relevant economies which should be
studied. She asserted that nations are just grab bags of cities and
their regions brought together by ‘bloody military force”. The true
purpose of national economic and military policies is to keep these
unnatural national entities from falling apart. However, Jacobs held
that these policies only insure the steady decline of both nation states
and their captive cities worldwide, resulting in economic stagnation on
a global scale.

Jacobs supplied many examples of how vital cities upgrade their
economies as entrepreneurs keep shifting to produce goods formerly
imported from more advanced cities, a process she calls “import
replacing”. These cities also improve the economies of their surrounding
regions, providing jobs for their inhabitants, markets for their raw
materials and manufactures, and eventually physically expanding into
those regions.

Jacobs believes that less economically advanced cities within nations
and in the Third World only can develop by building on local talents
and resources and by trading with other “backward” cities. Trading with
more advanced ones whose products are superior only discourages local
production. Through this kind of trade smaller cities can “bootstrap”
themselves into more advanced economies by stressing self-sufficiency
over disadvantageous international divisions of labor.

Unfortunately, rather than using this approach to develop backward
regions within nations or in the Third World, most nations have taken to
what Jacobs calls “transactions of decline”. These transactions are
subsidies for poorer regions funded by taxing more successful cities and
regions thereby draining their investment capital. The three prime
transactions of decline she identifies are: 1) military production to
both maintain empire and prop up backward regions; 2) welfare in the
form of direct payments to individuals, as well as rural and urban
development boondoggles; and 3) trade with backward nations emphasizing
generous loans (which may or may not be paid back) and even direct
grants of financial aid and aid-in-kind. Jacobs strongly opposed such
“transactions.”

Jacobs also contended that cities need their own currency as a
feedback mechanism whose value would fall with the relative decline in
the value of the cities’ products. This would discourage expensive
imports and encourage local entrepreneurs to begin producing formerly
imported products locally. Such dynamics could start the city on a new
cycle of expansion. Jacobs believed a single national currency stifles
this feedback mechanism and is the primary reason cities cannot stop
their decline once it begins. The main beneficiary of a centralized
currency system tends to be the largest city, especially if it engages
in substantial import-export trade and is also the national capital.
Thus we see many nations with one monstrous city like Tokyo, Mexico,
Paris, Cairo or Bombay, and many smaller stagnant or declining cities.

Hard money advocates might reject Jacobs’ criticism of a single
national currency because they believe that a gold standard would act,
in effect, as a single national or even worldwide currency. However,
Jacobs believes that even with a metal standard, the value of the
currencies of different sovereign cities would vary according to the
values of the goods they. Not being a consistent free marketeer, it does
not occur to Jacobs that there might be several competing currencies
even within a single city.

Jacobs definitively recommends the breakup of large nation states
through secession of its cities and regions. However, she lamented that
“virtually all national governments, it seems fair to say, and most
citizens would sooner decline and decay unified, true to the sacrifices
by which their unity was won, than prosper and develop in division”.
That may be far less true today.
Jacobs hoped that the world would cast up new “pattern states” made
up of pioneers willing to try the secessionist experiment. In fact she
was optimistic that someone would do so “if it really is within human
capacities to divide large sovereignties before they have reached a dead
end of disarray.” I am sure she would be very encouraged by the views
of Vermonters sympathetic to secession.